Today, Covered California released the attached proposed rates for the 2018 individual market, announcing that all 11 of its participating health insurance companies will return for the upcoming year. Covered California Executive Director Peter V. Lee said the average statewide rate change for 2018 will be a 12.5 percent increase, and noted that consumers can reduce that amount to less than a 3.3 percent increase if they shop for the best value and switch to the lowest-priced plan in the same metal tier. In addition, consumers will see federal subsidies rise, as they are tied to the price of the second-lowest-cost Silver plan. Those subsidies will help offset a significant portion of the rate change.

The rate change varies by health plan and region. Covered California notes that without the Affordable Care Act-mandated health insurance tax — a one-time increase of an average 2.8 percent — the average increase would have been less than 10 percent.

Despite ongoing uncertainty as to how the federal government will handle cost-sharing reduction (CSR) payments, Covered California instructed health insurance companies to submit their rates assuming direct payment to fund the CSR subsidies would continue, and to submit a separate CSR surcharge to “load” any costs to fund this program onto Silver-tier plans for those who receive subsidies. As a result, Silver-tier consumers may see an additional “CSR surcharge” that averages 12.4 percent if there is no commitment from the federal administration to fund these payments through 2018. Covered California notes, however, that while the gross or total premium for consumers receiving subsidies would reflect this CSR surcharge, in most cases, consumers would not see a “net” change in what they would pay since the premium tax credit would also increase. Both the proposed rate change and the cost-sharing reduction (CSR) surcharge are currently under review by state regulators, the Department of Managed Health Care and the California Department of Insurance.

In releasing these rates, Covered California also communicated to Secretary of Health and Human Services Tom Price and the Centers for Medicare & Medicaid Services Administrator Seema Verma the need for clear guidance on the ongoing funding of the CSR subsidy program.

Although all insurance companies that offered plans through the exchange in 2017 are returning, some have been impacted by uncertainty at the federal level. Due to some insurers – particularly Anthem Blue Cross of California — scaling back their coverage regions, about 10 percent of those enrolled in Covered California will need to select a new plan. However, Covered California notes that the individual market in California remains very competitive, and there are no “bare” counties or areas where consumers have no plan options. In addition, 83 percent of hospitals in California will be available through at least one Covered California health insurance company in 2018. More information is available in a fact sheet developed by Covered California.

Amber Kemp provides advocacy and support regarding government-funded programs and other health care coverage policy issues affecting California hospitals and health systems. She has an extensive background in Medi-Cal and previously worked in the director’s office at the California Department of Health Care Services (DHCS) where she managed implementation of the Medi-Cal Section 1115 “Bridge to Reform” Waiver for the $3.3 B Delivery System Reform Incentive Payments (DSRIP) for designated and non-designated public hospitals. Prior to joining DHCS, she served as a special assistant to state Board of Equalization member Betty Yee.

Kemp has a master’s degree in business administration from Mills College in Oakland.